Top 10 Benefits of Tech in Fashion Supply Chain - Idea Usher
Tech in Fashion Supply Chain

In the fashion industry market, technology has emerged as a transformative force, reshaping the traditional supply chain dynamics from design to delivery. The fusion of fashion and technology has not only revolutionized the way garments are produced and distributed but has also brought forth a myriad of benefits that propel the industry forward into a new era of efficiency and innovation.

Adoption of technology can help apparel brands in tracking the movement of goods throughout the supply chain, from the sourcing of materials to the delivery of finished products. This can enhance efficiency and decrease costs. It provides brands with the opportunity to acquire valuable insights into their sourcing processes…

What is the Fashion Supply Chain?

The Fashion Supply Chain refers to the intricate network of entities and services involved in the journey of clothing and accessories from inception to the hands of customers. Here’s a comprehensive breakdown:

  • Design: It all begins with the creation of designs for the apparel or accessories to be produced, detailing specifications like colors, fabrics, stitching, and fastenings.
  • Sourcing of Raw Materials: Once manufacturers receive these specifications, they proceed to acquire the necessary raw materials. This stage involves collaborating with stakeholders such as silk, cotton, and linen growers.
  • Manufacturing: The acquired raw materials transform finished garments at advanced manufacturing facilities.
  • Distribution: Following manufacturing, the finished products are dispatched to warehouses utilizing various transportation methods and skilled labor.
  • Retailing: From warehouses, the goods are then shipped to retailers, both online and brick-and-mortar stores, for sale to end customers.

Given the complexity of fashion supply chains, software automation plays a pivotal role in planning, ordering, and monitoring goods and shipments across all stages. Effective supply chain management can significantly enhance profit margins for fashion companies.

Transparent communication among all involved parties at each stage is paramount for a successful fashion supply chain. Such communication helps minimize lead times, enhance product quality, and ensure timely delivery to retailers and customers. A robust fashion supply chain not only reduces production, inventory, and logistics expenses but also elevates customer satisfaction.

Key Market Takeaways of Fashion Supply Chain

According to GrandViewResearch, the apparel supply chain market achieved a value of USD 863.75 billion in 2021 and is forecasted to grow at a Compound Annual Growth Rate (CAGR) of 3.8% from 2022 to 2028.

Key Market Takeaways of Fashion Supply Chain

Source: GrandViewResearch

Amidst the growing demand for apparel from the fashion sector and the expanding online retail channels, integrating cutting-edge technologies can offer unique value propositions to fashion businesses. By embracing automation, data analytics, and artificial intelligence, companies can optimize inventory management, forecast demand more accurately, and improve production planning processes. This not only reduces operational costs but also enhances the overall customer experience by ensuring timely delivery of fashionable products.

Recently, LVMH, in collaboration with Prada and Cartier (part of Richemont), has introduced the Aura Blockchain Consortium, marking the world’s inaugural luxury blockchain initiative. This partnership aims to address authenticity, responsible sourcing, and sustainability challenges by offering consumers enhanced transparency and traceability throughout a product’s lifecycle. 

The state-of-the-art Aura Blockchain technology links a product ID to a client ID, enabling consumers to access comprehensive product history and authenticity proof from raw materials to point of sale and beyond. Leading brands like Hublot, Bvlgari, and Louis Vuitton are already utilizing the Aura platform, each customizing their experience while adhering to strict client privacy standards.

Top 10 Benefits of Tech in the Fashion Supply Chain

Here are the top 10 benefits of technology in the fashion supply chain,

1. Leveraging Artificial Intelligence 

Artificial Intelligence (AI) has become a cornerstone for brands aiming to revolutionize the shopping experience, data analysis, trend prediction, and inventory management. Generative AI, in particular, plays a pivotal role in accelerating creative processes and minimizing manual labor for designers.

Indeed, Generative AI holds tremendous potential for transforming the retail industry. Here’s how it’s shaping the landscape:

Personalized Product Recommendations: Generative AI analyzes customer data to deliver tailored product recommendations and offers. Crafting individualized shopping experiences and discounts based on past behavior, it enhances sales and fosters customer loyalty.

Inventory Management and Supply Chain Optimization: Generative AI assists retailers in managing inventory levels efficiently by predicting demand patterns and optimizing stock levels. This proactive approach prevents overstocking or stockouts, streamlining supply chains and ensuring optimal inventory management.

Automated Content Creation: Generative AI automates content creation tasks such as generating product descriptions, social media posts, and marketing campaigns. Producing engaging copy, visuals, and videos, saves time and resources for retailers.

Also read, “Top 5 AI App Trends in 2024

Several leading brands have already integrated Generative AI into their operations:

  • H&M employs AI algorithms for personalized recommendations and designing unique patterns and prints.
  • Stitch Fix utilizes AI to curate customized fashion boxes tailored to individual style preferences, body measurements, and trends.
  • Zara leverages AI for inventory management and demand forecasting, optimizing stock levels and minimizing excess inventory.
  • The North Face collaborated with IBM Watson to develop an AI-powered chatbot that assists customers in finding outdoor gear based on their preferences.
  • Gucci explores generative AI for creative purposes, experimenting with AI-generated designs and patterns to push the boundaries of fashion innovation.

2. Real-time monitoring and Transparency by IoT

Logistics companies face challenges such as rising transportation costs, stringent regulations, and increasing customer expectations. Factors like fuel prices, global expansion, technology advancements, labor costs, and commodity prices impact operating costs.

IoT devices facilitate real-time tracking of fleet operations, optimizing routes, and providing customers with live updates on their deliveries. Sensors integrated into IoT devices measure various factors like location, temperature, humidity, and movement, ensuring product authenticity, monitoring storage conditions, and enhancing quality management

Inventory management is enhanced through IoT devices like RFID tags and sensors, improving visibility and accuracy while reducing manual labor.

Also read, “How To Hire IoT Developers? A Complete Guide

IoT-enabled inventory systems enable real-time monitoring of supply levels, facilitating informed decisions and preventing shortages.

IoT optimization contributes to efficiency, waste reduction, and improved overall supply chain performance.

In the fashion industry, several brands have embraced IoT technology to enhance manufacturing processes, improve efficiency, and offer innovative products:

  • LOOMIA: Designs and manufactures soft, flexible circuitry that can integrate seamlessly into soft goods, offering features like heating, lighting, and data sensing.
  • Coded Couture by IVYREVEL: Collaborated with Google to develop the Coded Couture app, providing personalized fashion experiences to users.
  • FITBIT: Known for fitness wearables, Fitbit has influenced the fashion industry by integrating health and activity tracking into stylish accessories.
  • AMAZON ECHO: Amazon’s Echo Look, equipped with a camera and AI, offers style advice and helps users make fashion choices.
  • EVRYTHNG: A platform enabling brands to create smart products connected to the internet for real-time tracking and personalized experiences.

3. Mobile Commerce

Mobile commerce, or m-commerce, refers to purchasing activities conducted on mobile devices, whether through apps or mobile browsers. It includes shopping on mobile websites, within dedicated apps, using virtual marketplaces, and utilizing digital wallets like Apple Pay or Google Pay.

Why Mobile Commerce Matters?

With smartphones being essential in daily life, they serve as the primary means of accessing online shopping platforms. Many consumers see mobile shopping as essential for convenience, driving demand for seamless mobile experiences.

US retail m-commerce sales are projected to reach $558.29 billion by 2024, accounting for 7.4% of total retail sales. Social media platforms enable seamless purchases through shoppable media and native checkout tools, facilitating purchases directly from social media posts or ads.

Shoppable Media and Social Commerce

Shoppable Media: Allows for direct purchases from branded content or ads on social media or retail apps, leading users to product pages or direct purchase links.

Social Commerce: Users discover products through brand accounts, influencer content, or sponsored ads on social media. Platforms like Instagram offer native checkout tools for in-app purchases.

Fashion Brands Leveraging Mobile Commerce and Social Media:

  • ASOS: Excels in social commerce with shoppable posts on Instagram, allowing users to discover and buy products effortlessly.
  • Nike: Combines fitness tracking, personalized content, and in-app shopping, leveraging social media to showcase new releases and exclusive offers.
  • H&M: Offers an immersive shopping experience with personalized recommendations and easy checkout in its mobile app, driving traffic through social media.
  • Sephora: Integrates augmented reality for virtual makeup try-ons in its app and engages users through influencer collaborations and interactive content on social media.

3. Increasing Brand Awareness using AR/VR

Virtual Reality (VR) and Augmented Reality (AR)  are revolutionizing the fashion industry, providing immersive experiences and enhancing customer interactions. Here’s how these technologies are shaping the landscape:

Brand Message: AR and VR enable companies to convey powerful messages and demonstrate their commitment to sustainability. For example, Chiquita utilized AR and VR to showcase its sustainable practices, allowing shoppers to virtually explore the journey of bananas from farms to stores.

The ‘Try-On’ Experience: VR and AR enable customers to visualize products in their environment, enhancing the online shopping experience. Virtual try-ons for clothes, makeup, and furniture help customers make informed purchase decisions by seeing how products fit or complement their surroundings.

Enhanced Online Shopping: Virtual showrooms and immersive experiences make online shopping more engaging. Brands like IKEA use AR apps to allow users to place furniture virtually in their homes, bridging the gap between online browsing and in-store tryouts.

Experiential Marketing: AR and VR create opportunities for experiential marketing, offering unique and memorable experiences. Customers can virtually attend fashion shows, explore designer studios, or visualize home decor, immersing themselves in the brand story.

Fashion Brands Embracing VR and AR:

  • Gucci: Gucci leads in using VR with its digital sneakers, such as the Gucci Digital Sneakers Auroboros App, offering users the ability to customize and wear virtual sneakers in the digital realm.
  • Zara: Zara integrates AR by providing virtual models in its app, allowing customers to see how clothes look on these models before making purchases.
  • Chanel: Chanel’s Lip Scanner Technology enables customers to virtually try on different lipstick shades, personalizing the shopping experience and making it more engaging.
  • Farfetch: Farfetch’s Store of the Future combines AR and VR seamlessly, allowing customers to explore products in 3D, visualize their fit, and interact with virtual showrooms.
  • Nike: Nike’s SNKRS app uses AR to transform sneaker shopping, offering virtual try-ons, exploring details, and unlocking exclusive content.

4. Better Designs with Online Vector Editors

Online vector editors are valuable tools for the fashion industry, empowering designers to create precise and intricate vector-based designs directly within web browsers. Here’s how these tools enhance creativity and productivity:

Efficient Design Creation: Designers can create logos, patterns, and apparel graphics seamlessly within online vector editors, streamlining the design process.

Collaborative Workflows: Real-time collaboration features enable multiple team members to work on the same design simultaneously, fostering seamless collaboration and swift iteration.

Streamlined Iterations: Designers can quickly make adjustments, experiment with color palettes, and fine-tune details, ensuring fashion brands stay ahead of trends and meet deadlines.

Responsive Design: Online vector editors facilitate responsive design by allowing designers to create scalable vector graphics that maintain quality across various platforms.

Notable Online Vector Editors:

  • Vectr: A free online vector graphics editor with an intuitive interface and real-time collaboration features, suitable for both beginners and experienced designers.
  • Gravit Designer: Offers a more advanced feature set compared to Vectr, suitable for basic and complex projects, allowing precise and flexible vector drawing.
  • Boxy SVG Editor: Focuses on simplicity and efficiency, providing essential tools for vector editing, ideal for quick tasks and straightforward designs.
  • Figma: Known for its collaborative interface design capabilities, Figma also supports vector editing, allowing designers to create and edit vector graphics with real-time collaboration features.

5. Autonomous Supply Chain

An autonomous supply chain represents a paradigm shift where AI (artificial intelligence) and machine learning algorithms handle all supply chain planning and execution functions with minimal human intervention. 

Traditional supply chain processes often involve manual coordination, outdated IT systems, and unreliable data sources. Autonomous supply chains, on the other hand, integrate big data—including internal, external, and customer information—and utilize advanced analytics at every planning step. Automation of processes leads to better coordination, real-time decision-making, and improved efficiency.

  • Increased Revenue: Autonomous supply chain planning can potentially increase revenue by up to 4 percent.
  • Inventory Reduction: Companies may experience a reduction in inventory of up to 20 percent.
  • Cost Savings: Supply chain costs can decrease by up to 10 percent..

Fashion Brands Innovating Supply Chains:

  • SHEIN: This global online fashion retailer adopts an agile supply chain, leveraging intelligent strategies to predict demand accurately and virtualize certain supply chain steps.
  • Adidas: Utilizes blockchain technology for supply chain transparency, providing details about suppliers for greater visibility and accountability.
  • Zara: Redesigns its supply chain with AI-powered solutions like Alibaba’s Xunxi, enabling faster adaptation to trends and more efficient production.
  • H&M: Implements artificial intelligence in various supply chain aspects, including chatbots for purchase requests and smart warehouses for inventory management, optimizing inventory levels and tracking availability across stores, warehouses, and production.

Also read, “Generative AI In Supply Chain: A Complete Guide

6. Cloud-Based Supply Chain Management:

Fashion brands are adopting cloud-based systems for supply chain management, enabling direct collaboration with manufacturers, retailers, and suppliers in the textile and apparel industries. Through cloud technology, companies can monitor their supply chain and inventory in real time, making it more agile and cost-effective.

Cost Savings: Cloud computing eliminates upfront infrastructure costs, allowing fashion companies to focus on core activities like designing, manufacturing, and retailing.

Scalability: Cloud services can easily scale based on demand, accommodating seasonal fluctuations and market dynamics.

Collaboration: Cloud platforms facilitate seamless collaboration among stakeholders, improving communication and coordination.

Data-Driven Insights: Cloud-based analytics provide fashion brands with insights into consumer behavior, inventory management, and supply chain performance.

Also read, “Developing Cloud Native Application on AWS

Examples:

  • Zara: Utilizes cloud computing and big data analytics for real-time inventory tracking and efficient supply chain management, enabling quick production of top trends affordably.
  • Other Brands: Dior, Macy’s, Nike, and Nordstrom leverage AI to increase sales, promote goods, and enhance customer interactions.

7. Predictive Analytics in Fashion Supply Chain

Predictive analytics involves using historical data and machine learning to forecast trends, demand, and inventory needs in fashion. Brands like H&M and Zara rely on it for demand forecasting, gathering insights from various sources and using algorithms to predict future demand. This optimizes inventory levels, preventing stockouts and excess inventory.

  • Reduced Stockouts: Accurate demand prediction ensures sufficient stock availability.
  • Optimized Inventory: Avoidance of overstocking saves capital and warehouse space.
  • Enhanced Agility: Predictive models enable quick adjustments to changing trends or events.
  • Better Allocation: Strategic inventory allocation across channels improves efficiency.

Fashion Brands Using This Technology

  • Stitch Fix: Uses data science and machine learning for personalized styling boxes, optimizing inventory, and forecasting demand.
  • True Fit: Provides data-driven personalization, matching shoppers with products and helping brands optimize strategies.
  • Lalaland: Uses AI for realistic virtual models, aiding in size recommendations and improving customer satisfaction.

8. Supply Chain Visibility Platforms

Supply chain visibility platforms offer end-to-end tracking of raw materials, parts, and finished goods throughout the supply chain journey, enhancing transparency in complex supply networks. These platforms optimize inventory levels, streamline transportation activities, and increase profitability. 

Key features include API integration, machine learning for predictive analytics, carrier performance evaluation, reporting insights, and geofencing for real-time monitoring. Benefits include enhanced fulfillment, optimized inventory, risk mitigation, supplier and carrier accountability, and cost savings.

Examples of this Technology:

  • Renoon: Connects consumers with sustainable fashion brands, providing transparency and traceability using blockchain technology.
  • The ID Factory: Digitizes the supply chain of fashion and luxury brands, utilizing RFID tags and QR codes for tracking products from raw materials to finished goods.
  • TrusTrace: Helps fashion brands measure and improve environmental and social performance, using AI and blockchain to collect and analyze data from suppliers, manufacturers, and distributors, creating a digital identity for each product.

9. Digital Twins

Digital Twins are revolutionizing the fashion industry by offering virtual replicas of physical fashion products, supply chains, and individual customers. These virtual representations enable designers to experiment with design elements, fabrics, and styles without physical prototypes, bridging the gap between the physical and virtual realms. Here are some benefits of digital twins for fashion:

Better Back-End Operations:

  • Facilitate information sharing and collaboration among stakeholders in the fashion supply chain.
  • Enable seamless communication and feedback between designers and manufacturers.
  • Store vital product data and synchronize it with PLM, DAM, and/or PIM systems.
  • Cloud-based SaaS tools provide access to product information and virtual renderings from anywhere, increasing efficiency and reducing errors.

Improved Sample Experience:

  • More virtual product testing for B2B and B2C goods.
  •  Visualize how garments or accessories will look and feel without creating physical samples.
  • Reduce waste, speed up the design process, and ensure better product fit and quality.

Examples of this Technology:

Zara uses digital twins to simulate designs, fabrics, colors, and garment fit on various body types.

10. Wearables

Wearable technology, encompassing electronic devices integrated into clothing or accessories, is reshaping the fashion supply chain, enhancing operational efficiency, communication, and data management. Here’s how wearables are revolutionizing various aspects of the fashion supply chain:

Warehouse Operations: Smart glasses, wristbands, or wearable scanners enable real-time access to information, aiding in item location, inventory tracking, and stock management without interrupting tasks.

Internal Communication: Voice-activated headsets or smartwatches facilitate seamless communication among team members, allowing for instant messaging, voice calls, and alerts, thereby improving coordination.

Real-Time Data Sharing: RFID-enabled wristbands or smart gloves streamline data collection and sharing, allowing workers to scan items, update inventory, and record product movements in real time, reducing errors and improving accuracy.

Navigation and Mapping: Wearables with GPS and AR capabilities assist staff in navigating warehouses by overlaying digital maps onto the physical environment, facilitating optimal route finding.

Mobile Point-of-Sale (mPOS): Wearables serve as mobile payment devices in retail stores, allowing sales associates equipped with smartwatches or ring scanners to process transactions on the shop floor, enhancing customer service.

Real-World Examples:

  • Amazon uses wearable wristbands to guide warehouse employees, track movements, and optimize order picking.
  • DHL Supply Chain employs smart glasses for warehouse staff, displaying order information and navigation instructions.
  • Zara’s store associates use smart mirrors with RFID technology to enhance the customer fitting room experience.

Interesting Case Studies on Tech Apps for Fashion Supply Chain

Let’s get into some intriguing case studies related to technology applications in the fashion supply chain:

1. Zalando

Zalando, Europe’s leading online fashion retailer, encountered profitability challenges in 2014 ahead of its IPO. To meet investor expectations, the company needed a data-driven supply chain solution.

Zalando's Supply Chain

Solution: Zalando harnessed advanced technology, including big data, analytics, and machine learning, to address specific challenges in the fashion industry such as high SKU counts, seasonality, and elevated return rates.

  • Zalando operates a responsive distribution network comprising nine fulfillment centers across Europe, each tailored to a specific product mix and service level. Dynamic routing algorithms are employed to allocate orders to the optimal fulfillment center based on factors like customer location, inventory availability, and shipping costs.
  • Real-time inventory visibility and demand forecasting form the basis of Zalando’s reliable order promises. Machine learning models predict customer demand and replenishment needs for each SKU and location, optimizing inventory allocation and reducing stock-outs.
  • To manage high return rates, Zalando offers free and convenient returns to customers. Automated quality checks and smart dispositioning are employed to process returned items efficiently. Data analytics help identify reasons for returns, enabling improvements in product quality and customer satisfaction.

Zalando’s innovative technology has propelled it to become Europe’s leading online fashion platform, boasting over 35 million active customers and generating revenue exceeding €8 billion in 2020. Zalando is recognized as a pioneer and a benchmark for other fashion retailers and e-commerce companies.

2. ZARA

Zara, a flagship brand under the parent company Inditex, is renowned for its fast fashion model, allowing it to swiftly respond to evolving customer preferences and market trends.

ZARA Supply Chain

Supply Chain Model: Zara’s supply chain is vertically integrated, giving it control over design, manufacturing, logistics, and retailing. This integration enhances flexibility, speed, and quality control.

Innovative Technologies:

  • Demand Sensing: Zara leverages data from various sources, including point-of-sale systems, online platforms, and social media, to track real-time customer preferences and demand trends. This enables agile adjustments in production and distribution to prevent overstocking and markdowns.
  • Agile Manufacturing: About 60% of Zara’s garments are produced in-house or by nearby suppliers, utilizing advanced automation and robotics to reduce lead times, transportation costs, and environmental impact. Moreover, 85% of production capacity remains flexible to accommodate customer feedback and demand fluctuations.
  • Fast Distribution: Zara operates a centralized distribution system with two main warehouses in Spain, shipping products to stores worldwide twice a week. RFID tags, automated sorting, and optimization algorithms ensure efficient inventory management and replenishment.

Zara’s supply chain excellence has propelled its global success, with over 2,200 stores across 96 countries and revenue exceeding 19 billion euros in 2019.

Conclusion

Integrating technology into the fashion supply chain enhances efficiency by streamlining processes such as inventory management, production planning, and order fulfillment through automation and data analytics. This results in reduced lead times, lower operational costs, and improved productivity. Additionally, tech solutions improve transparency and traceability, ensuring compliance with ethical and sustainability standards and building consumer trust

Looking To Integrate Tech in the Fashion Supply Chain for Your Business?

Ideausher is your go-to solution provider for everything from mobile apps to web app development. With our expertise in technology and deep understanding of the fashion industry, we can help you leverage the power of technology to optimize your supply chain processes, enhance transparency, and deliver exceptional customer experiences. Let’s collaborate to transform your fashion business and stay ahead of the curve.

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FAQs

Q1: What are the benefits of technology in fashion?

A1: Technology in fashion brings numerous benefits, including enhanced efficiency in production processes, improved supply chain management, and increased customer engagement. By leveraging technology, fashion companies can streamline their operations, reduce costs, and deliver innovative products and experiences to their customers

Q2: How does technology impact the fashion industry?

A2: Technology has significantly impacted the fashion industry by revolutionizing various aspects of the business. It has transformed the way designers create, produce, and market their products, leading to greater efficiency, sustainability, and accessibility. Additionally, technology has democratized fashion, allowing for greater inclusivity and diversity in both design and consumption.

Q3: What is the technology in the fashion supply chain?

A3: Technology plays a crucial role in the fashion supply chain by improving transparency, traceability, and efficiency. Tools such as RFID tracking, data analytics, and blockchain enable companies to monitor the movement of materials and products throughout the supply chain, ensuring compliance with ethical and sustainability standards. Furthermore, technologies like automation and artificial intelligence optimize production processes, reducing lead times and operational costs.

Q4: What is the future of technology in the fashion industry?

A4: The future of technology in the fashion industry is promising, with continued advancements expected to drive further innovation and transformation. Emerging technologies such as 3D printing, virtual reality, and wearable tech are poised to reshape how fashion products are designed, produced, and consumed. Additionally, the integration of AI-driven personalization and data-driven insights will enable brands to offer more tailored experiences to their customers, fostering stronger brand loyalty and engagement. Overall, technology will continue to be a driving force in shaping the future of the fashion industry, driving progress toward greater sustainability, efficiency, and creativity.

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